Scania Value Quarter 4 2012


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Scania Value Quarter 4 2012

  1. 1. A MAGAZINE FOR SCANIA’S SHAREHOLDERS quarter 4 2012 % Operating margin Focus on 20 16 12 Southeast Asia Scania’s growing presence in the region. > PAGES 4–5 8 4 0 -10 -11 -11 -11 -11 -12 -12 -12 -12 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Report. Report. Price pressure Xxxx xxx xxx in Europe and xxx xxx xxx xxx in Brazil had a xx xxx. effect. negative > SID 2 > paGE 2 Interview. Interview. CFO Jan Ytterberg Xxxx xxx xxxxxx xxx on 2012 and the xx xxxxxx xxxx xxxx future xxx xxxxxx xxx. > paGE 3 > SID 3 Finance. Stock market. Analysts: xxxxxx Xxxx xxx Weak euro zone affecting xxx xx xxxxxx xxxx transport industry xxxx xxx xxxxxx. > paGES > SID 6–76–7 FIGURES IN FOCUS: FIGURES FOCUS: Xxxxx xxxx xxxxxxxx xx x xxxxxx xxxxx. > SID 4–5 XXX 4.75 Dividend per xxx xx Xxxxxx share (SEK) proposed by the xxxx xxxx xxxxx xxx Board of Directors. xxxx xxxxx xx.EN01_omslag.indd 1 2013-02-04 09:22:39
  2. 2. 2012 IN FIGURES Order bookings and deliveries by region, 2012 (number of vehicles) EURASIA Order bookings EUROPE Order bookings 6,979 +3% Deliveries 29,727 -10% 6,996 -7% Deliveries 29,032 -13% LATIN AMERICA AFRICA AND OCEANIA ASIA Order bookings Order bookings Order bookings 21,849 +10% 3,778 +1% 9,612 -29% Deliveries Deliveries Deliveries 18,129 -13% 3,851 +2% 9,393 -35% Net sales Net sales by product segment, 2012 Operating income and margin SEK m. Other 2% % SEK m. Operating income, SEK m. 25,000 Used vehicles 6% 20 Operating margin, percent 4,000 3,500 20,000 16 Services 21% 3,000 15,000 2,500 12 2,000 Trucks 61% 10,000 8 Engines 2% 1,500 1,000 5,000 4 Buses and 500 coaches 9% 0 0 0 4 1 2 3 4 1 3 4 3 2 4 1 3 4 1 2 4 2 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 10 11 11 11 11 12 12 12 12 12 10 11 11 11 12 12 12 11 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Key figures (SEK m. unless otherwise noted) 2012 2011 Change in % Net sales, Scania Group 79,603 87,686 -9 2012 IN BRIEF: Operating income, Vehicles and Services 7,694 11,881 -35 Operating income, Financial Services 606 517 17 TOTAL DELIVERIES Operating income 8,300 12,398 -33 decreased by 16 percent to Income before taxes 8,281 12,612 -34 67,401 vehicles Net income for the period 6,640 9,422 -30 Operating margin, % 10.4 14.1 SERVICE REVENUE was Return on equity, % 19.2 29.5 stable at SEK 17,092 m Return on capital employed, Vehicles and Services, % 22.8 38.1 Earnings per share, SEK 8.31 11.78 -29 EARNINGS PER SHARE Cash flow, Vehicles and Services 3,025 6, 970 -57 decreased by 29 percent Number of employees, 31 December 38,597 37,496 to SEK 8.31 Order bookings (units, trucks and buses) 71,945 76,843 -6 Deliveries (units, trucks and buses) 67,401 80,108 -16 2 SCANIA VALUE • Q4/2012 www.scania.comEN02_rapport.indd 2 2013-02-04 09:25:00
  3. 3. interview text: susanna berlin photo: dan boman “Looking ahead, we expect demand to return once economic activity recovers.” Jan Ytterberg, Scania’s CFO A weak 2012 and uncertain prospects in 2013. Cost control and flexibility are key “For Scania, the euro zone cri- but the year closed strongly, aided by exten- What steps have you taken to keep down sis and lower demand in many sive subsidies. In Russia, demand was good costs? markets dominated 2012. In while the Middle East was adversely affected by “Late in 2012, we imposed a general hiring 2013, we will focus on strong unrest in the region. Service demand was weak freeze and reviewed all consultancy ser- cost control and clearer priorities in southern Europe, while demand grew in vari- vices. In certain European markets, we made when it comes to projects and ous non-European markets.” adjustments in the structure of the service investments,” says Jan Ytterberg, How was profitability affected during network in order to better match changes in the year? customer behaviour. We gradually intro- Scania’s Chief Financial Officer. “Volume is the most important parameter duced stronger cost discipline, which we are for Scania’s profitability trend, so lower vehi- now working further with throughout the How would you describe 2012? cle deliveries pulled down earnings. Our costs organisation.” “The year was characterised by continued increased and capacity utilisation was low at the What will be Scania’s focus in 2013? great uncertainty in the global economy. There production units. Exchange rates also presented “We are mainly concentrating on continued was low economic growth in many regions. This a challenge. The strengthening of the Swed- volume flexibility and adjustment of the cost led to hesitancy among our customers. There is ish krona adversely affects us since a large part level to low demand. In the short term, the no interest in expanding the vehicle population of our cost base is in Sweden. Prices were also situation is hard to assess but looking ahead, in a situation of stable or lower transport vol- depressed in our two largest markets, Europe we expect demand to return once economic ume. Although a replacement need exists, some and Brazil.” activity recovers. transport companies instead opted to defer Were there any positive factors? “This is why we are continuing to invest in their investments. “Yes, Financial Services reported its best-ever prioritised development projects and we are “Demand for trucks, buses and coaches and earnings. Our growing service business outside continuing to expand our sales and services engines continued to be weak in most parts of Europe is positive; we are now starting to see organisation in emerging markets. Scania will Europe. Brazil, our largest market, began the the effects of larger vehicle populations due to have strengthened its position once demand year weakly due to lower economic activity and increased deliveries in emerging markets in returns, with good capacity in both the pro- the transition to the Euro 5 emission standard, recent years.” duction and service networks.” Q4/2012 • SCANIA VALUE 3EN03_interview.indd 3 2013-02-04 09:24:50
  4. 4. FOCUS: NEW BUSINESS OPPORTUNITIES IN SOUTHEAST ASIA Scania’s President and CEO Yangon is the largest city in Myanmar, Myanmar Martin Lundstedt during a country that is now opening up to the (formerly Burma) a visit to mining customer outside world and that has a strong need PAMA in Indonesia. to improve and renew its infrastructure. INDONESIA MYANMAR Capital: Jakarta Capital: Naypyidaw Population: About 238 million Population: About 50 million GDP: About USD 845 billion GDP: About USD 50 billion GDP forecast 2013*: +6.3 percent GDP forecast 2013*: +6.0 percent *Source: IMF *Source: IMF Increased presence in S the number of Scania vehicles in the country. In recent years, Scania has increased its vehicle deliveries to several markets in Southeast Asia. The vehicles now on the roads in Indo- Today we have around 2,900 mining vehicles nesia and Singapore are paving the way for growth in the service and between 150 and 200 buses on the roads,” business. Meanwhile, Scania is establishing new operations in says Mikael Benje, head of Scania’s representa- Myanmar, among other places. The development of that country’s tive office in Indonesia. infrastructure will generate attractive long-term opportunities. Opportunities in the service business Scania’s basic strategy is the same for all markets industry, PT Pamapersada Nusantara (PAMA), The large Scania vehicle population and the and segments — to offer customers the best profit- is based in Indonesia. PAMA has one of the demanding conditions in mines offer good ability during the service life of vehicles. In Asia, world’s largest fleets of mining vehicles, includ- opportunities for Scania to develop its service the challenge is that many transport companies ing 640 from Scania. business. still just look at a vehicle’s price and load capacity. “In a couple of years we managed to double “Here we have huge potential,” says Benje. But even today there are sectors that work on the basis of high capacity utilisation of vehicles and thus demand services that boost uptime. “There is huge potential in the service business. Indonesia has Asia’s fourth largest coal reserves and an extensive mining industry. This Mining vehicles are worked hard and require is reflected in Scania’s business in Indonesia, rapid access to parts.” which is 95 percent related to this segment. Mikael Benje, Head of Scania’s representative office in Indonesia. Scania’s largest global customer in the mining 4 SCANIA VALUE • Q 4 /2 012 www.scania.comEN04-05_focus.indd 4 2013-02-04 09:58:23
  5. 5. TEXT: ERIK ARONSSON, PER - OLA KNUTAS PHOTOS: ERIK LJUNGBERG , DAN BOMAN, ISTOCKPHOTO SINGAPORE Capital: SingaporeMyanmar Population: About 5 million rmerly Burma) GDP: About USD 325 billion GDP forecast 2013*: +2.9 percent *Source: IMF Singapore port traffic also offers potential business. I NDONESIEN “There is good demand for marine engines, Indonesia for example in pilot boats, but also for indus- trial engines in goods handling equipment,” says Armstrong, noting that there is good over- all potential when it comes to service-related products. Renewing the infrastructure Myanmar, formerly known as Burma, has recently opened up to the outside world. Like various other international companies, Scania is in the process of establishing itself there. Sca- nia’s recently appointed distributor Octagon has already sold numerous buses and coaches for domestic traffic between major cities. The Scania has an extensive fleet of city buses in Singapore. dealership is now building up a service network from Yangon (formerly Rangoon) in the south to Mandalay in the north. “The main focus in Myanmar during the nextn Southeast Asia few years will probably be on improving and renewing the infrastructure. We thus expect heavy demand for vehicles from the construc- tion industry. The country also has considera- ble natural resources in the form of timber, pre- cious stones and metals. This is driving demand for products for the forestry and mining indus- “Mining vehicles are worked hard and require presence for more than 35 years, has been the tries,” says Armstrong. rapid access to parts. One of the reasons we most successful of the European manufactur- There are often electricity supply problems, built a new parts warehouse in Singapore is that ers and currently has a market share of about requiring stand-by power of various kinds. we want to cut lead times in the region.” 14 percent. “The power grid has problems supply- In late 2012, sales of new vehicles were weak “Public transport is a key issue in Singapore. ing electricity, especially during the summer in Indonesia, partly due to a decrease in coal The government has allocated significant funds months when hydroelectric power is not so prices, but Benje is optimistic. In September, to increase the number of city buses. Among effective. There is huge demand for engines for Scania and local distributor United Tractors other things, this has meant that Scania since power generation in mines, shopping centres (UT) opened an assembly facility for buses in 2007 has delivered 1,100 city buses to SBS Transit and hospitals – anywhere that needs a stand-by Jakarta with a monthly capacity of 25 units. Ltd, Singapore’s largest bus operator,” says James power source,” says Armstrong. “During 2013, we expect to have roughly the Armstrong, head of Scania in Southeast Asia. In October 2012, Scania’s President and CEO same volume as in 2012: 450 to 500 trucks in “With so many Scania buses out on the roads, Martin Lundstedt visited the company’s work- Indonesia. We expect growth in the coming we have great potential to provide the operator shop in the capital Naypyidaw as well as the years. Aside from this, we anticipate a volume with servicing and preventive measures in order construction site of a large new workshop in of about 80 buses and 50 engines annually.” to maximise bus uptime. We also see opportuni- Yangon. ties for Scania to assume operation of customer “If the positive trend continues, Myanmar can Concentration on city buses workshops.” become one of the most important markets in Singapore’s vehicle market is characterised by The construction boom in Singapore is the region for heavy vehicles of western Euro- strong competition from Chinese and Japanese expected to continue, generating demand for pean standards and quality,” said Lundstedt manufacturers. Scania, which has had a local Scania’s heavy vehicles. The country’s intensive during his visit. Q 4 /2 012 • SCANIA VALUE 5 EN04-05_focus.indd 5 2013-02-04 09:23:26
  6. 6. FINANCE: ECONOMIC OUTLOOK FOR 2013 Continued focus on euro crisis The European debt crisis remains falling GDP figures. In Asia, most economies ership is enacting stimulus measures that may the biggest threat to the global continued to grow in 2012, but at a much lower contribute to a higher growth rate. economy in 2013, according to rate than before, since exports to Europe and “It looks as if the new regime has decided analysts. One bright spot is Brazil, the US have declined, affecting the market for to stabilise the economy by pumping money where continued government heavy vehicles. into various government infrastructure pro- subsidies are expected to sustain “Europe is not an isolated island. When jects. In this way they can probably maintain a growth. European consumers spend less and exports growth rate of around 8 percent,” says Michael to China and the US fall, this has a negative Boström, chief analyst at Danske Bank. The European debt crisis, slower growth in impact on cargo volume. Then hauliers post- China and uncertainty about US government pone their investments in new vehicles,” says Expectations in Brazil finances. These are the three biggest prob- Trapp. Another bright spot in the economic gloom lems facing the world economy in early 2013, The global economic outlook for 2013 looks is the performance of the world’s sixth largest according to many financial observers. Taken somewhat better, but the euro zone crisis economy, Brazil, whose government has decid- together, this will result in a weak global mar- remains in focus and is expected to play a crucial ed to renew its stimulus measures. According ket for the vehicle industry, especially in the role. Household and public debt restructuring, to a Reuters survey, growth of 3.5 percent is first half of 2013. a credit crunch and increasingly weak domestic expected in the country during 2013, compared “But in the third quarter of 2013, we expect demand in the wake of budget cuts are con- to a modest 1.0 percent in 2012. The stimulus that demand may recover somewhat, mainly tributing to the downturn. Since the region has measures include reduced key interest rates, tax driven by higher consumption in the US but large imbalances, the recovery will probably take cuts, incentives for local industry through gov- also by renewed momentum in Chinese infra- longer than normal. ernment procurement and improved financing structural investments,” says Anders Trapp, measures for export companies. analyst at SEB Enskilda. Rebound expected in China In the aftermath of the US presidential elec- The euro zone crisis means that Europe has In China, GDP growth slowed down in 2012. But tion, the question of whether it is possible to suffered its second recession since 2009, with there are now signs that the country’s new lead- solve the country’s fiscal problems is in on the agenda. The relatively slow recovery is con- tinuing but uncertainty about fiscal policy is expected to dampen growth, which is predicted “Europe is not an isolated island. to end up at around 2 percent in 2013. Among When European consumers spend positive signals are that consumption is appar- ently rising somewhat and that the housing less and exports to China and the market seems to have gained momentum. US fall, this has a negative impact “Taken together, developments in the US and China may boost global GDP growth again on cargo volume.” during the third quarter of 2013. Europe will Anders Trapp, analyst at SEB Enskilda lag behind, but we will gradually see a positive impact here too,” says Trapp. 6 SCANIA VALUE • Q4/2012 www.scania.comEN06-07_finance.indd 6 2013-02-04 09:23:50
  7. 7. text: erik aronsson, per - ola knutas photos: conny hetting , istockphoto China: Growth is expected to acceler- Europe: Budget cuts will reduce ate somewhat compared to 2012, since consumption and demand, leading to the country’s new leadership is pumping weak or negative growth in 2013. money into infrastructure projects. Brazil to grow faster in 2013 GDP forecast for 2013 Euro zone (-0.1) OECD countries (1.4) United States (2.0) Brazil (4.0) China (8.5) India (5.9) Brazil: Growth is expected to accelerate in 2013, due to the -2 0 2 4 6 8 10 government’s renewed stimulus measures and other factors. Source: OECD Economic Outlook, 27 November 2012 Q4/2012 • SCANIA VALUE 7EN06-07_finance.indd 7 2013-02-04 09:24:00
  8. 8. IN BRIEF editor: per - ola knutas photos: peggy bergman, scania Focus on sustainable transport Carbon dioxide emissions in Europe’s trans- Several speakers port sector can be reduced – here and now stressed that there as well as in the future. That was the theme of is no single solution Scania’s Transport Conference in Brussels on 14 but that a reduction November 2012. The conference gathered 300 in CO2 emissions high-level representatives from industry, public can be achieved authorities and the European Union to discuss through new and sustainable transport development. improved technol- Scania’s President and CEO Martin Lundstedt ogy, better adapta- emphasised that there is no conflict between tion of vehicles for sustainable transport and profitability for the specific transport Humberto Delgado Rosa and Christophe Pavret de La Rochefordière, who transport sector. needs, improved work with climate policy at the European Commission, participated in the “In the tough economic situation Europe is logistics and driver conference. On the right Martin Lundstedt, President and CEO of Scania. currently facing, we see a shift towards trans- training. port services that are more and more economi- At the conference, Scania emphasised the their CO2 emissions by 15-20 percent, and by cally, socially and environmentally sustain- Ecolution by Scania concept, which customis- 50 percent or more if they shift to biofuels. able. This goes hand in hand,” he told the es sustainable solutions for individual trans- Read more about Scania’s Transport Conference on: conference. port companies. It enables hauliers to reduce Recruiting more female managers Scania is one of ten large Swedish companies participating in the “Battle of the Numbers” project, aimed at raising the share of women in operational management positions. “For Scania’s long-term success, we must recruit from the entire pool of available talent. A number of workshops will give project partici- We must ensure that our female employees really pants an opportunity to exchange experience. want to remain with the company and that more women choose Scania as an employer,” says H&M, IKEA, SAAB, Sandvik, SEB, SPP, SSAB Scania’s President and CEO Martin Lundstedt. and Volvo. Each company has selected ten Other participating companies are Ericsson, women for the project. A TaxiBot pushback tractor equipped with a Scania engine is being tested at the Châteaur- Would you like to subscribe? oux-Centre Airport in France. It tows Airbus For a free subscription, visit Scania value is published by Scania A320 type aircraft. and targeted to Scania shareholders. Publisher Engines that save Per Hillström, Editor-in-Chief aviation fuel Scania has signed an agreement to deliver up UPCOMIng EvEnTS Project Manager Art Director to 3,000 Tier 4i emission-compliant engines engines until 2022 for use in aircraft towing 22 March 2013 Production vehicles. Annual Report 2012 Appelberg Publishing Group They will be manufactured by French-based Printing: Trosa Tryckeri company TLD, an airport ground support 23 April 2013 Cover photo: Dan Boman equipment (GSE) specialist. TLD chose engines Interim Report from Scania for their compact and modular January-March 2013 Contact Scania Investor Relations design, which enables their adaptation to future 151 87 Södertälje, Sweden emission standards. 3 May 2013 Tel: 08-553 81 000 The vehicles will be used to move aircraft Annual General Meeting 2013 E-mail: between gate and runway. This saves jet fuel and reduces greenhouse gas and noise emissions as the aircraft will not have to start their engines until minutes before take-off.EN08_news.indd 8 2013-02-04 09:24:18